TECH’S GIANT FIGHT
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Google intensified the battle with Microsoft yesterday, saying the software behemoth’s $44.6 billion hostile bid for Yahoo! “raised troubling questions.”
In a terse broadside of what could be a protracted war, Google’s chief legal officer, David Drummond, hammered on concerns about Microsoft’s software monopoly and its history of clashing with regulators over antitrust issues.
“Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?” he wrote in a blog post on Google’s corporate Web site.
“While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies – and then leverage its dominance into new, adjacent markets.”
Drummond identified instant messaging and Web e-mail as areas where a Microsoft-Yahoo! would have an “overwhelming share” of the market and questioned whether the combined company would try to limit consumer access to competing services.
“This is about more than simply a financial transaction, one company taking over another,” he wrote. “It’s about preserving the underlying principles of the Internet: openness and innovation.”
Microsoft’s general counsel, Brad Smith, defended the bid, saying it would increase rather than hurt competition by creating a viable competitor.
“The combination of Microsoft and Yahoo! will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising,” Smith said in a statement.
“The alternative scenarios only lead to less competition on the Internet.”
For its part, Yahoo! appears to be in no rush to reach a decision. In a blog post on its corporate site, the company said it could take “quite a bit of time” to evaluate Microsoft’s unsolicited offer.
Google and Microsoft are taking turns making anticompetitive claims against each other as they fight over billions of dollars in online advertising.
Google gets the vast majority of its revenue from paid search advertising but is trying to diversify into display and other types of online ads.
For months, Microsoft waged a campaign to derail Google’s $3.1 billion acquisition of online ad specialist DoubleClick, arguing the deal would allow Google to extend its search dominance to the rest of the Internet ad space.
In December, the Federal Trade Commission cleared the DoubleClick deal, saying the combination was “unlikely to substantially lessen competition.” It still lacks approval from European regulators.